In a recent tweet, a member of the crypto community revealed a groundbreaking theory regarding MicroStrategy (MSTR) stock float compression. The person explained the so-called “compression multiple theory” and drew parallels between GameStop (GME) trading dynamics during the 2021 short squeeze and the current situation at MSTR.
According to the theory, the reduction in MSTR's share float caused by a combination of forced buy-side volume and robust retail investors mirrors the pattern seen in GME during its unprecedented run-up. The tweet predicts that MSTR, which is currently trading at around 1.2x its net assets, could potentially see a rise in value equivalent to multiples of GME's net assets, which reached 49x during the short squeeze.
MSTR is expected to trade close to its 2021 net worth, around four times, due to factors such as increasing retail interest in Bitcoin and bullish sentiment. The theorist attributes this compression phenomenon to the proportion of passive investors in the MSTR and changes in allocations to related indices.
Will be interesting. I am bullish on $MSTR. — Samson Mow (@Excellion) February 14, 2024
In response to the tweet, prominent crypto entrepreneur Samson Mow expressed his bullish outlook on MSTR, illustrating the sentiment shared by many in the crypto community. MicroStrategy's significant holdings of 190,000 BTC and $3.5 billion in unrealized profits further reinforce optimism about the company's prospects.
The implications of this theory extend beyond finance, as the theorist warns of possible disruptions in various sectors, including government, real estate, banking, and AI.
As MSTR continues to gain attention in the crypto community, the stage is set for a potential market shakeup, with Bitcoin proponent Samson Mow among the optimists about its prospects.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.